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Troop charity misleads donors while lining consultants' pockets

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Left, an image of a soldier with a care package from Operation Gratitude originally posted on the Operation Gratitude website; right, the same image, used in an email sent by Move America Forward soliciting donations. COURTESY OF PROPUBLICA

Troop charity misleads donors while lining consultants' pockets

by: Kim Barker | .

ProPublica | .

published: August 06, 2014

In February 2013, Move America Forward announced an ambitious fundraising goal. The charity, launched in part by one of the most prominent figures in the Tea Party movement, had adopted the 800 Marines in a battalion fighting in Afghanistan and wanted to send them all care packages.

"For some troops, these care packages are the only mail they will receive all year," the group said in one email solicitation.

The charity later described the fundraising drive as a rousing success: In less than five weeks, all 800 Marines in a 1st Marine Division battalion nicknamed Geronimo were sent care packages and notes in Afghanistan, it claimed.

But that couldn't have been true. The Marines of Geronimo weren't even in Afghanistan during Move America Forward's fund drive. Instead, they were deployed more than 3,000 miles away, in Okinawa, Japan.

Move America Forward calls itself the nation's "largest grassroots pro-troop organization," and has recruited a bevy of Republican luminaries, including former Presidents George H.W. Bush and George W. Bush and former Vice President Dick Cheney, to support its efforts.

Yet an examination of its fundraising appeals, tax records and other documents shows that Move America Forward has repeatedly misled donors and inflated its charitable accomplishments, while funneling millions of dollars in revenue to the men behind the group and their political consulting firms.

In several instances, the charity has taken images and stories from other groups and from veterans themselves without permission to use in fundraising appeals.

Last year, Move America Forward even solicited funds by claiming a partnership with Walter Reed National Military Medical Center, the largest hospital for wounded servicemembers in the country. No such partnership existed, Defense Department officials say.

The charity's funds and other assets also appear to have been used to subsidize three conservative political action committees, records show.

Charity watchdogs have long criticized Move America Forward for spending too much on administrative fees and having little outside oversight. For instance, it earned zero stars out of a potential four from the rating organization Charity Navigator.

But experts on campaign finance and taxation say Move America Forward's practices may trigger more than bad ratings. Its activities could violate tax rules, which prohibit charities from engaging in partisan politics or overly benefiting the people who run them.

"They're playing audit roulette," said Marcus Owens, a lawyer who once ran the division on tax-exempt organizations in the Internal Revenue Service. Owens said Move America Forward reminded him of the Coalition for Freedom, a charity linked to then-Senator Jesse Helms that lost its tax-exempt status with the IRS largely because of its political activities in the mid-1980s. "They're betting the IRS won't find them, or won't find them in time."

The driving force behind Move America Forward is Sal Russo, 67, the longtime political consultant who is listed on the 10-year-old charity's tax returns as chief strategist.

Russo and his associates have previously drawn attention for lavishing funds raised through the committees on themselves, using this money on an Alaskan cruise and fancy hotels as well as paying themselves huge consulting fees.

Russo didn't respond to questions from ProPublica. Danny Gonzalez, a spokesman for Move America Forward, did not answer questions either, instead providing a four-paragraph defense of the charity. "We are proud of the fact that we always appropriate our donor's (sic) funds ethically and in the spirit of our mission to support the troops," he said, adding that Move America Forward was currently preparing 2,000 boxes of care packages for shipping.

It's not clear who currently oversees Move America Forward's day-to-day operations. The former executive director, Shawn Callahan, left in 2012 and does not seem to have been replaced. Callahan also didn't respond to questions, although last year, he defended the group to ProPublica in an email and said Move America Forward had been audited recently by the IRS. (The IRS does not comment on individual taxpayers.)

"I personally oversaw the audit where I worked with the IRS as they went over every penny spent with a fine-tooth comb," Callahan wrote in March 2013. "As expected, they reported that we were in full compliance and all our expenditures were appropriate."

Bill Durdin, the family readiness program coordinator for the 1st Marine Division, said Move America Forward recently sent care packages to at least five units in the division, but said a "thank you" letter from him the charity included in a March 2013 email praising donors for the Geronimo pledge drive had actually been written a year or two earlier. In an email to ProPublica, Durdin described the charity's use of his letter as "a serious case of 'Cut & Paste(ing)'!"

Move America Forward raises much of its money with its annual fundraiser, called Troopathon, held this year in the Ronald Reagan Presidential Library and broadcast live on the Internet.

Over the years, Troopathons have featured live and taped appearances by conservative stars from entertainment, media and politics, including actor Gary Sinise, rock idol Gene Simmons of KISS, Sarah Palin, Rick Perry, Rush Limbaugh and Sean Hannity. The charity counts all the money raised in the month of the broadcast as part of Troopathon.

"I'm hoping this will be the biggest and best event that we've had to let our troops know that we will not forget you," spokeswoman Debbie Lee said during an appearance over Memorial Day weekend on the Breitbart News Sunday radio show that kicked off this year's fundraiser. "We do recognize, even though, you know, there's been changes over there, that you're still there fighting.

"And we're here for you. We've got your back."

***

Move America Forward says on its tax returns that its mission is to "provide and promote support (for) our brave men and women in the armed forces."

It raised $7.8 million from 2008 to 2012, about 44 percent of it from the month of Troopathon.

Much of the rest came from responses to the emailed appeals it sends out every day or two, emotional notes packed with exclamation points and capital letters. The emails often seize on a tragedy like the Boston bombing and then ask for help sending boxes filled with items like Jelly Belly jelly beans, Swiss Miss hot chocolate and Hoo-Ahhs field towels.

In news releases and articles, the charity boasts that over its lifespan it has delivered more than 315 tons of care packages to American troops in Afghanistan and Iraq. Tracking the truth of this assertion is difficult, however. Neither the Defense Department nor the International Security Assistance Force in Afghanistan monitors who sends care packages to military personnel.

Each package for an individual servicemember is paid for with a $24.99 donation, the charity says, but it's unclear what the $24.99 pays for. The items in each care package are donated, a former consultant who spoke on condition of anonymity said, and volunteers put them together. "Our volunteers pack each box to the brim," the charity's outreach coordinator Scott Raab told a radio show over Memorial Day weekend.

Other charities that send care packages to Afghanistan say they do so more cheaply. The group Operation Gratitude, for example, says it costs $15 to assemble and ship a care package. (The U.S. Postal Service charges $15.45 to mail a large box to a military base in Afghanistan.)

In soliciting funds for care packages, Move America Forward frequently uses testimonials from troops or their relatives. Some are legitimate, but in several cases, ProPublica found, the charity took photos and stories without permission and used them as its own.

One solicitation emailed on April 2, 2013, included a note from "Lacey," Move America Forward's contact in Afghanistan. "An update that I received the 60 (packages) you sent off on March 25 & 26th," Lacey wrote. "We got them yesterday and already got them on our chinook today out (to) some dustoff guys who have been eating MREs for a month now."

The note promised to send more pictures "like before," and included a photograph of a Chinook helicopter unloading supplies.

But ProPublica traced the photograph back to a stock photo company called StockTrek Images. It was actually taken on Sept. 22, 2004, when soldiers were unloading supplies in Afghanistan for a combat resupply mission.

ProPublica traced other photographs employed in fundraising pleas by Move America Forward to media outlets such as Agence France Press, Reuters and the San Antonio Express-News, to photos posted by servicemembers on Flickr, to random photos pinned on Pinterest. Move America Forward even used the photograph of a soldier hugging a woman found on Pinterest for a Valentine's Day pitch, digitally removing the soldier's name, Boyer, from his cap.

In February 2013, Move America Forward sent an email including a photograph of two grinning soldiers holding packages of Double Stuffed Oreos. "The easiest way to get chocolate that will not melt to our troops in Afghanistan is with the Oreo cookies in our care packages," the charity wrote below the photo.

In a fundraising email sent earlier this year, the charity included a photograph of a smiling soldier holding up a care package, his uniform nametag smudged out.

But Move America Forward had taken the picture, which originally featured four other soldiers alongside the one in the email, from the website of the Wisconsin Department of Military Affairs. The soldiers were in Iraq, and not, as Move America's email suggested, in Afghanistan. And the package the soldier held was not from Move America Forward.

"The care packages in the photo are from the American Legion and the VFW posts in Watertown, WI," Maj. Paul Rickert of the Wisconsin Department of Military Affairs said in an email.

Move America Forward has also used images from the websites of AdoptAPlatoon and Operation Gratitude, two charities that send care packages regularly to troops, to solicit donations.

Carolyn Blashek, the founder of Operation Gratitude, confirmed to ProPublica that two photographs used in fundraising emails by Move America Forward actually depicted soldiers with packages sent by Operation Gratitude. Blashek emailed ProPublica originals of one of the photographs, as well as others of the same soldiers, to prove it.

Ida Hagg, AdoptAPlatoon's executive director, said she instantly recognized a photograph in which soldiers held up placards spelling out "Thank You," because it was sent to AdoptAPlatoon. AdoptAPlatoon asked the soldiers' permission to use the photograph on its website, Hagg said.

"I'm a little taken aback," Hagg said after seeing the Move America Forward email using that photograph. "Oh my gosh. That is definitely our photo, absolutely our photo."

Hagg added that it was possible that the same soldiers also sent the same photograph to Move America Forward.

In at least one case, Move America Forward took the story of a Marine overcoming shattering war injuries and used it without permission in fundraising efforts.

"You're Never Going to Believe What This Double Amputee Marine Did!" announced the subject line of an email sent Dec. 11. The message below outlined the heroics of Larry Draughn, a former Marine who lost his legs in a roadside bomb in Afghanistan but managed to help rescue stranded motorists during a snowstorm in Ohio.

"Troops like Larry serve as a perfect reminder of the kind of sacrifice and selflessness displayed by thousands of our soldiers, marines, airmen and sailors still serving in Afghanistan and other places around the globe, fighting to keep us safe and free!" the email said. "This Christmas remember those troops still serving overseas and send them a care package full of love and support — as well as a few delicious treats!"

Draughn told ProPublica he had never heard of the charity, which did not contact him before using his story.

"I'm gonna call and ream their butts," he said. "I never gave them permission to use my name that way."

After Draughn called, he said, the charity apologized and promised to send him a free gift. More than two months later, the gift still hasn't arrived.

Gonzalez did not respond to questions asking about the charity's use of veterans' stories without their permission and why photographs from other charities and the military were used in its fundraising appeals.

In 2013, Move America Forward put out a news release announcing a partnership with Walter Reed to send special wounded warrior care packages to servicemembers recovering in the hospital. About the same time, the charity announced a similar partnership with Veterans Affairs hospitals.

In an email that April, under the heading of "Move America Forward Walter Reed," the charity urged: "We need your help! We aren't receiving enough support for our wounded troops!"

But the Department of Defense, which oversees Walter Reed and the VA hospital system, doesn't endorse — or partner with — charitable organizations. If a charity wants to be listed as a community resource on the Defense Department-managed website, OurMilitary.mil, it has to meet certain criteria, including being nonpartisan and being favorably vetted by at least two charity evaluators, such as Charity Navigator.

"You'll note that Move America Forward is not listed on the site," said Lt. Col. Cathy Wilkinson, a Defense Department spokeswoman.

Gonzalez did not respond to a question about the charity's claims regarding Walter Reed and the VA system.

Walter Reed confirmed that Move America Forward did mail about 200 packages there in March 2013. "It was a one-time thing," said Sandy Dean, Walter Reed's spokeswoman.

Meagan Lutz, a spokeswoman for VA hospitals, said the VA system hadn't officially worked with Move America Forward. "I'm hearing all negatives — we haven't worked with this organization and many haven't heard of it," Lutz said.

Still, Move America Forward sent at least 16 emails in April and May 2013 seeking donations, often referring to its alleged partnerships.

At the end of 2013, the charity claimed in an email to have sent "thousands of bags full of necessary items to troops at military hospitals." Move America Forward still advertises Wounded Warrior Care Packs for VA hospitals and Walter Reed, filled with things like grippy hospital socks, a dental kit, snacks, a notebook, a pen and playing cards.

***

Charities like Move America Forward, which accept tax-deductible donations, are not allowed to engage in partisan politics like other nonprofits, such as trade associations and social-welfare groups. Charities are also not allowed to pay excessive fees or wages to staffers or consultants, according to federal tax rules.

But an examination of Move America Forward's tax returns shows that it is deeply intertwined with Russo's political enterprises and businesses, paying millions of dollars to him and his consulting firm.

According to its five most recent tax returns, Move America Forward paid out more than $2.3 million to Russo or Russo, Marsh and Associates for services including "program management and advertising." That's about 30 percent of the charity's overall expenditures over that time.

"It was just so shady," said Kelly S. Eustis, a former consultant for the Tea Party Express, also known as Our Country Deserves Better. "With PACs, I know it's dirty money--it's politics. But this is a charity that's supposed to be helping the troops."

Some of that money might have passed through Russo's firm, paying for TV ads that the charity has claimed to run praising the troops. No major broadcaster in a top 10 TV market has reported an ad buy by Move America Forward since the Federal Communications Commission required such records be put online in 2012, however. Gonzalez, the Move America Forward spokesman, did not respond to a question asking whether the charity had run any TV ads on network affiliates in major markets since 2007.

Move America Forward also routes charitable donations through companies started in part by Russo and Callahan, the charity's former executive director.

In May, one button on the charity's website sent donors to the website of a company that processes credit-card donations called DonationSafe, founded by Callahan. Move Forward America doesn't reveal how much it pays DonationSafe to process donations, but the company has received substantial fees for similar work for Russo-affiliated PACs. The Conservative Campaign Committee, then known as the Campaign to Defeat Barack Obama, paid DonationSafe almost $267,000 for credit card processing in the 2012 election cycle, when the PAC brought in $3.9 million.

Callahan, who has also worked for Russo, Marsh, and consulted for the Tea Party Express, did not reply to ProPublica questions about processing work related to Move America Forward.

Another donation button on Move America Forward's website allows donors to send money for individual care packages or packages for an entire battalion. When a ProPublica reporter donated $24.99 to send a single package in May, her credit card bill showed the money went to a limited liability company called The Campaign Store. So did another donation made to the Troopathon event.

Russo is the president of The Campaign Store, which described its business as "retail political products" in a 2007 filing with the California Secretary of State.

In its 2004 application for tax-exempt status, filed under penalty of perjury, Move America Forward told the IRS that it would not directly or indirectly share facilities, equipment, mailing lists or other assets with any political organization.

Yet Move America Forward shares its Sacramento office suite with at least two of the three PACs set up by Russo, Marsh, as well as The Campaign Store, DonationSafe and Frontline Strategies, a political consultant firm where Callahan is a partner.

According to the charity's 2012 tax return, Move America Forward paid about $82,000 in rent that year. The PACs reported paying no rent for the same period, according to filings with the FEC. The office's property manager confirmed to ProPublica that the rent for the office is now about $83,000 a year, plus fees for use of the common area, indicating that in 2012, the charity likely covered the rent for all of the suite's occupants.

"That office rental arrangement is clearly inappropriate," said Bruce Hopkins, a nonprofit lawyer in Kansas City, adding that the charity was subsidizing the PACs. "I can tell you right now, the IRS would be all over that."

In his email in March 2013, Callahan said Frontline Strategies paid Russo, Marsh and Associates to sublease office space. Neither Russo nor Gonzalez responded to questions about the rent agreement.

There's also evidence that Move America Forward has subsidized the PACs by allowing them to use its mailing list, a valuable asset that the IRS says charities are not supposed to just give away.

Eustis, the former Tea Party Express consultant, said Russo and others "basically used the Move America Forward email list to start online fundraising," back in 2008, when the charity list had about 50,000 names and the Tea Party Express was just starting. "It's definitely intermingled," he said.

A ProPublica reporter's father created an email address and signed up for the charity's mailing list on Nov. 21, using the address for nothing else.

At first, a few emails arrived from Move America Forward. Then, on March 20, an email arrived from one of the PACs, the Conservative Campaign Committee, with the subject line, "Sarah Palin Motivating Conservatives to Vote in 2014," asking donors to give money for a "fantastic new TV ad in key swing states." On March 21, an email came from the Tea Party Express.

There's no indication in regulatory or tax filings that Russo's PACs bought or rented Move America Forward's mailing list. The IRS would find almost any possible explanation for how the PACs are using the charity's mailing list without paying for it problematic, nonprofit experts said.

"It's certainly a warning sign," said John Pomeranz, a Washington lawyer specializing in election activity by tax-exempt groups. "Charities must not give any resources to PACs. They can sell or rent those lists for fair market value. But if there's not fair market value paid, there's a problem."

The line between Move America Forward and the Move America Forward Freedom PAC is even more blurry. The PAC's website describes it as "a Political Action Committee organized and brought to you by Move America Forward."

Move America Forward's YouTube page features a campaign commercial from its sister Freedom PAC. The charity's Facebook page links to the ad as well, and has asked people to donate to the PAC, saying "Please Help!" just days before the 2012 election.

"If the charity says, 'Go visit our PAC and give it money — that's a problem," said Lloyd Hitoshi Mayer, a law professor and associate dean at the University of Notre Dame who specializes in nonprofits and campaign finance. "Any type of support from the charity to the PAC is problematic. — If you want to be a charity, if you want to be tax-exempt, you cannot be involved in political campaigns, you cannot support or oppose candidates for office. And Congress says so."

Even as nonprofit experts, officials from other charities, and former insiders have raised questions about Move America Forward, this year's Troopathon appears to have gone off without a hitch on June 25.

Former presidential candidate Herman Cain, Texas Sen. Ted Cruz and many others sent pre-taped endorsements that were shown at the seven-hour fundraiser.

Flanked by American flags, co-host Melanie Morgan, Move America Forward's cofounder and board chairwoman, begged viewers to donate money. She said the charity wanted to send care packages to every servicemember in Afghanistan and Iraq, adding that the charity tried to keep its costs "very low" to maximize the resources going to servicemembers. Dwindling resources in Afghanistan had left some troops hungry, making Move America Forward's work more urgent than ever, she said.

"These care packages that we're putting together are not just a luxury item anymore," Morgan told one guest. "In some cases, they're necessities."

By the end of the broadcast, the charity announced Troopathon had raised almost $300,000. Among the donors was Gary Sinise, who spent an hour on stage asking for contributions and gave $5,000 while on the set. (Through his publicist, Sinise declined to respond to questions from ProPublica about Move America Forward.)

"I think we'd have a catastrophe on our hands quite frankly if some of the great military nonprofits weren't out there right now," he said at Troopathon. At the end of his appearance, he thanked Morgan and touched her arm. "You're doing great," he said.